Alcohol consumption in India

Rise in consumption mainly buoyed by demand for alcohol manufactured by local players, MNCs still to make a mark in the Indian market

Alcohol is the most preferred intoxicating substance used and thoroughly abused in India. Traditionally the elixir is said to have been fermented for the first time in the firmament itself, meant to be a drink for the Gods. Passing down through the ages from tribal to urban men and women it has been a tipsy story for alcohol. From being a traditional festive drink to flaming tequila shots at the bar, the consumption of liquor has always gone up in the country. A recent study indicated that the consumption of alcohol had grown multiple folds in recent years. Recent figures indicate that the intake of Indian Made Foreign Liquor (IMFL) grows every year at a rate of 15% per year. Kerala and Punjab top the list of heaviest consumption in a state wise break up for liquor, according to one report. The UB group which is a major player in the alcohol sector has seen a phenomenal rise to the top and presently enjoys almost complete market dominance except the north-east. States also rely on the huge revenue that alcohol generates and going by the rise in consumption, it would be redundant to state that alcohol is a fuel firing the Indian economy.

The F&B sector has identified the huge potential that the alcohol sector holds and therefore many of them have tried to cash in on the boom. Sanjay Coutinho, CEO of Barista Lavazza, an established coffee shop chain tied up with Four Seasons wine, said about the retailing of wine at the café, “We are pleased to have tied up with the UB group and will aim to cater to the young adult segment who are exposed to global lifestyles.” This indicates that there is a strong influence of the western lifestyle on the youth when it comes to alcohol consumption patters.

Mumbai based B-school student and entrepreneur Aayush Gupta explains, “Drinking has become such an integral part of our get-together and parties that we often tend to take it for granted. I feel that there is more responsibility on the youth today and most indulge in drinking in moderation.”

Although the per capita consumption of alcohol in India is quite low, it is still one of the leading sources of revenue for the states. Among the alcoholic drinks retailed, whisky is one of the favourites followed by rum and beer and finally wine. The demand for country liquor has also increased but the rise is not as significant as that in IMFL.

MNCs lag behind

Most of the Indian market is dominated by local players as MNCs have only moved in till the premium and the super premium liquor segments. Though it would be good to mention here that the boom in economy and the rise in standard of living for the common man also signals fresh opportunities for MNCs lagging behind in the liquor business. Duty on import of liquor has also almost doubled since the turn of the century. Within India itself, the policy of alcohol retail varies from state to state. While some states like Maharashtra, Uttar Pradesh and Tamil Nadu have a liberal policy, some states like Haryana and Andhra Pradesh do have good experiences in attempting to make these states dry and have finally had to roll back the policy.

It has only been a few years that the government has allowed organised retail in the booze market in the country. This comes from the fact that there has been an upsurge in the consumption of liquor and more consumption is expected to come in still.